As someone who makes boutique speakers and am 4 months into my companies existence (we launched at AXPONA), risk of the company going out of business is what makes people anxious. Which I get, but it is lower risk than you think. It costs me about $50/month to maintain my legal entity and keep my web store open. I might scale back on marketing but I can maintain that indefinitely.
Incidentally, check me out at www.verdantaudio.com
A speaker is largely made from three key parts, cabinet, driver and crossover:
- Cabinet - by far the hardest to get right. It requires knowledge to design, technical skill to manufacturer and is the easiest place to cut corners to save money. I spent six month studying cabinet design and testing different materials to develop one, simple, stand-mount cabinet and hired an aerospace company to produce it for me. This is the foundation for a great speaker and the most expensive drivers and a good crossover are meaningless if this is wrong. There are consulting firms that will do this for you but it is pricey. I am going to introduce wood cabinets at Capital Audiofest and again, I hired a master cabinet maker who specialize in custom cabinets.
- Crossover - By far the hardest to actually do well but it is inexpensive to hire someone to design one for you once you have selected your drivers and have a cabinet design. Once you have a good sounding base crossover, it is also easy to make modifications. I attempted to design my own and they were not good. Hired someone. Tested a few configurations and they are spectacular. I don't even make my own crossovers. Assembly is $15 a unit. Relatively low risk.
- Drivers - No small company is making their own drivers. We all buy from Scanspeak, Seas, Accuton, Eton, etc... Frankly, so do a lot of midsize companies. This is extremely low risk as the companies producing the drivers are large and competent. And, if the world ended, the drivers are backed by their warranty.
The balance is assembly and soldering. Are they using OFC or CCA in terms of wire? What kind of binding posts, ports, etc... Soldering requires some practice but even that can be worked around if you are incompetent with torx screws and quick connects.
The other question is consumer direct or retail.
- Retail adds margin. A small company selling through retail is almost assuredly a poor value vs. a large company. Margins are the same but costs are certain to be higher due to purchasing in much smaller quantities.
-Consumer direct is not necessarily a better value but does allow smaller companies to compete in mid level price points. I can make an acceptable margin and compete with Harman, Kef, B&W, etc... and deliver a product that is as good or better compared to the Performa, R or 700 series if I sell consumer direct. I am a poor value if I tried to sell that same product through retail. Anything below that is very challenging.
If you choose your products correctly you can feel good that the product is made in the USA if that sort of thing matters to you and you are supporting domestic craftspeople at least in terms of cabinet, crossover and assembly. Plus, most consumer direct companies offer you 30 days in-home to demo the product. Try getting your local retailer to let you take home a pair of Sopra No1s to do an in-home demo with no restocking fee.
